The ten-day cease-fire appears to have benefited Kyiv more than the pro-Russian rebels in eastern Ukraine. Just days after launching a new offensive, Ukraine’s military retook the key city of Slovyansk after heavy artillery and armor attacks left parts of the town “in ruins.” New Ukrainian leader Petro Poroshenko ordered the nation’s flag to be raised over the capital as the rebels apparently fled in disarray:

Resurgent government forces on Saturday hoisted the Ukrainian flag over pro-Russian rebels’ main stronghold after a devastating shelling assault that levelled much of the city but delivered Kiev its biggest success of the campaign.

The self-proclaimed mayor of Slavyansk confirmed to AFP that insurgents had abandoned the rustbelt city of 120,000. A local resident said by phone that barricades once manned by the camouflage-clad gunmen stood abandoned since the early morning.

Ukraine’s ability to win back Slavyansk — home to one of the country’s biggest weapons storage facilities that fell to the insurgents on April 6 — marks a key turning point in three months of low-scale warfare that has threatened the very survival of the ex-Soviet state.

Ukraine’s Interior Minister Arsen Avakov said in a Facebook post that the withdrawal was led by senior militia commander Igor Strelkov — alleged by Kiev to be a colonel in Russia’s GRU military intelligence unit.

Both Strelkov and Moscow deny any GRU link despite Western claims that the Kremlin is covertly funding and arming the uprising to destabilise Kiev’s new pro-European leaders and retain control over Russian-speaking eastern regions of Ukraine.

The Russians have even more reason to disclaim any connection. The newfound strength in the Ukrainian military surprised the rebels to such an extent that locals describe a rout, at least according to Ukraine’s government. Rebels discarded their arms as they dispersed pell-mell:

Interior Minister Arsen Avakov said the militants had taken off.

“They are running. This morning intelligence suggests that [separatist militant leader Igor] Girkin and a significant number of fighters have fled Slovyansk … Some remain. Rest going to Gorlovka,” he wrote.

Poroshenko said armed forces were active in the town, but it was unclear to what extent the Ukrainian army had control of it.

He said that residents were handing in weapons dropped by the militants.

Rebel leaders later confirmed the retreat to the BBC, and other sources say it’s worse than they’re admitting:

Alexander Borodai, prime minister of the self-proclaimed Donetsk People’s Republic, said on a rebel website: “Due to the overwhelming numerical superiority of the enemy our men were forced to abandon their positions.”

Rebels were quoted as saying they had pulled back to the nearby city of Kramatorsk.

But witnesses reported seeing dozens of rebels abandoning checkpoints in Kramatorsk, apparently heading for the main city of Donetsk.

According to the rebels, the Ukraine military offensive broke their morale:

Rebel leaders were quoted as saying the decision to abandon Sloviansk was taken by Igor Strelkov, the military commander of the self-declared Donetsk Peoples’ Republic (DPR).

Mr Strelkov, whose real name is Igor Girkin, had pleaded for Russian intervention on Friday saying his men had lost the will to fight.

So far, Vladimir Putin has been awfully quiet as his proxies fall in eastern Ukraine. The fall of Slovyansk and the plea of Strelkov notwithstanding, the Russian president focused on fence-mending with the US instead of fencing with Poroshenko. Putin offered Barack Obama his warmest wishes for Independence Day yesterday and urged the two nations into a closer partnership for global security:

Russian President Vladimir Putin said Friday he hoped for better ties with the United States in a July Fourth message to his U.S. counterpart, Barack Obama.

The Independence Day wishes come at a time when relations between the two nations are at their lowest ebb since the Cold War, fueled by tensions over Russia’s actions in Ukraine.

According to the Kremlin website, Putin “expressed a hope for the successful development of the relationship between both countries, based on equal rights and utilitarianism, despite all the difficulties and disagreements they are facing at the moment.”

Putin also said that since the two nations are responsible for global security, they “should cooperate in the interests of not just their own people, but the entire world.”

That got a resounding meh from the White House:

“We’ve seen the message but have no particular comment,” said National Security Council spokeswoman Caitlin Hayden.

Why has Putin not rushed to Strelkov’s aid? Western sanctions may have something to do with that. Putin doesn’t want to incur any more damage to his economy, let alone to the oligarchs who provide his political support and whom Putin protects. On the other hand, Putin has extended his reach into the Middle East so successfully that the ongoing provocations in eastern Ukraine may have become counter-productive to his long-term goals. He wants Russia to take its former place as the countering superpower to the US, especially in the Eastern Hemisphere, and he’s arguably succeeded. Why push harder in Ukraine now, especially if Strelkov and his forces can’t manage to hold Slovyansk on their own?

That won’t last forever, though. Slovyansk is still quite a ways from the Ukraine-Russian border. It’s not like Slovyansk is Luhansk, after all. Oh, wait …